Folsom faces at least $130 million in deferred maintenance ahead of budget cycle
While Folsom dug itself out of a roughly $3 million general fund deficit this past year, the city’s financial situation continues to limit future planning.
Folsom currently has $130 million to $170 million in deferred maintenance projects, according to City Manager Bryan Whitemyer, who said the amount includes city facilities and parks, not necessarily items like police and fire equipment.
“We’ve right-sized our budget so we can pay the mortgage on the house,” he said, giving an analogy. “We don’t have enough money to make all the repairs to the house, so we’re paying so we can live and enjoy our home, but things are breaking down that we may not be able to repair.”
These deferred maintenance projects could impact the quality of life in Folsom if not properly addressed, according to Whitemyer. For instance, about 35 miles of trails need attention, totaling $9 million, and $50 million in repairs are needed at parks, including Kemp Park, which serves youth sports.
While not all the projects are urgent, Whitemyer said, it could cost $13 million annually if spread out across a decade, which is about half of the city’s general fund after 2025-26 budget expenses.
If the city dips into its general fund to cover these expenses, it could impact the municipality’s credit rating, potentially making it more difficult to receive favorable interest rates and funding options for projects. Meanwhile, the city is limited in how it can increase revenues.
California municipalities can’t increase the property tax rates due to Proposition 13, Whitemyer said, so local governments often look to sales tax to generate additional revenue. Some communities, like neighboring Rancho Cordova, have approved additional sales tax measures to close the gap.
Folsom tried to implement a tax measure in 2024 with Measure G that would have added a 1% local sales tax. Measure G failed with about 62% of voters opposing the proposal.
The failed Measure G came as Folsom’s sales tax revenue flattened at about $27 million. Whitemyer said the increase in online shopping following the COVID-19 pandemic is likely behind the trend, since sales tax revenue goes to the municipality where the point of sale is, which is a warehouse in the case of online shopping. If Measure G had been approved, the extra 1% tax would have also applied to online purchases.
But with Measure G out of the picture, Whitemyer said it’s difficult to increase revenues to fully cover the maintenance cost of about $13 million a year.
Folsom is expected to start its budgeting processes later this month. Whitemyer said his office plans to first propose a budget that would maintain city services as they are, but from there conversations about potential cost reductions could take place.
“Our goal is to have a conversation with the community and the council to see if we should look at any other cost reductions to see if we want to close that deferred maintenance gap,” Whitemyer said.
Folsom brought its budget deficit down in September by cutting 20 staff positions, restructuring public safety and eliminating one fire engine company.
As for bringing back a ballot item like Measure G, Whitemyer said it’s not up to him. A similar measure could come through a resident petition or the City Council. However, he said the city hopes to build public trust by making it easier for residents to understand the budgeting process.
He said a lack of trust is one reason he believes the measure failed.
